Despite legal troubles, Johnson & Johnson is in the financial driver's seat for 2022 and beyond, CFO says
Headlines about its underachieving COVID-19 vaccine, its attempts to resolve opioid and talc litigation and the coming departure of CEO Alex Gorsky suggest that it has been a difficult year for Johnson & Johnson.
But Tuesday was a reminder that the company remains a financial powerhouse as it reported (PDF) earnings that beat analyst estimates. Fueled by a 13.8% increase in pharma sales, J&J reported revenue of $23.3 billion for the third quarter, an increase of 10.7% from last year. As a result, the company has revised its guidance for annual sales.
It was a successful quarter for the company’s other divisions as sales of medical devices were up 8% and sales of consumer health increased 5.3%. But they couldn’t match the performance of pharma, which racked up $12.99 billion in revenue, up from $11.42 in the same quarter of last year.
Oncology, which posted global sales growth of 16.5%, was led by multiple myeloma treatment Darzalex, whose sales jumped to $1.58 billion for the quarter, an increase of 43%. Prostate cancer drug Erleada registered $344 million in sales, a bump of 66% from a year ago.
Meanwhile J&J’s immunology portfolio, which was up 11.7%, was led by inflammatory disease stalwart Stelara. That drug continued its upward trajectory with $2.38 billion in sales, a 22% increase, with share gains of 4 points in Crohn’s disease and 7 points in ulcerative colitis in the U.S.
In addition, emerging plaque psoriasis treatment Tremfya racked up $537 million, for a 64% increase from a year ago.
As for its COVID-19 vaccine, J&J reported sales of $502 million, which beat analyst expectations but didn’t result in a change in guidance for the year as the company still expects to rack up $2.5 billion. The guidance isn’t affected by the expected news that the FDA will grant approval of a second shot of the vaccine to those 18 and older, provided their first shot wasn’t within the last two months.
“I always smile a little bit whenever there’s vaccine news because it seems to be an overly pronounced impact on our stock—good or bad—and it makes me chuckle a little bit because the strength of our business is really in our pharmaceutical, medical device and consumer health these days,” Wolk said.
On the legal front, Johnson & Johnson recently moved to transition its talc litigation liabilities to a new subsidiary, for which it plans to declare bankruptcy. The company has set aside $2 billion for that effort, but plaintiffs have said they'll resist the move.
Before that, J&J agreed to pay $5 billion as part of an opioid settlement with three major U.S. drug distributors.
Oct 19, 2021
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